G-20 Meeting Prompts New Collection of Economic Essays

WSJ
11/10/2008
Following up on the widely-read book of essays they released for month’s G-7 meeting, Barry Eichengreen, a University of California, Berkeley economist, and Richard Baldwin, an economist at the Graduate Institute of International Economics in Geneva have put together another collection of policy prescriptions from leading economists ahead of this Friday’s G-20 confab — “What G-20 leaders must do to stabilize our economy and fix the financial system.”
The essays were made available Monday on VoxEU.org, the Internet portal of the Centre for Economic Policy Research.
“An empty declaration — ‘we assembled G-20 heads of state commit to stabilizing our economies and strengthening the regulation of our financial systems through ongoing collaboration,’ like that issued by the G-7 in October — will only demoralize the markets,” the two economists argue in their introduction. “Signs that our leaders are bereft of ideas and unable to agree to priorities will tell investors that the future will resemble the recent past.”
While their G-7 effort came together in little more than a day, this time the two economists worked with a longer lead time and were able to draw from a deeper pool of experts, including Stanford University Nobel laureate Michael Spence and Yale University’s Ernesto Zedillo, Mexico’s former president.
Eichengreen and Baldwin found that essay writers widely agreed on four areas. First, that government’s need to move fast and coordinate their actions in response to the crisis. Second, that strengthening existing institutions, like the IMF, so that they have the firepower necessary to deal with the crisis. Third, that given the scope of the problems, policymakers need to think creatively about new approaches. And last, policymakers need to avoid hastily enacted regulations and protectionists measures that could end up impeding economic growth. – Justin Lahart